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Thursday, December 8, 2016

Crime rates and interest rates are they linked?

Crimes rates have plummeted in the U.S. since the
mid-1990s. Most of the credit for this remarkable trend has been given to
an enlarged criminal justice system—largely more police, tougher sentencing and
a massive prison complex.

But we have found a larger and much more powerful
explanation: A drop in interest rates and, in particular, long-term
interest rates, writes James Austin a criminologist and Gregory D. Squires a
professor of sociology at the George Washington University, in The Crime Report.

This has been the case in the U.S. at least since
1953. And it is almost a perfect correlation.

Today, both crime rates and interest rates are at historic
lows. Conversely, in the late 1970s and early 1980s, both reached historic
highs. Rarely does social science research yield such a high statistical
association and strong relationship between two phenomena, particularly when
they are not intuitively related.

What accounts for this startling finding? What does it
mean? And how might it inform public policy?

One critical implication is that lower interest rates mean
not just lower crime rates, but also greater economic prosperity.

About Matt

An analysis of crime and punishment from the perspective of a former prosecutor and current criminal justice practitioner.
The views expressed on this blog are solely those of the author and do not reflect the opinions or postions of any county, state or federal agency.